Google Shares Fall on Missed Quarterly Expectations
Google has been spending resources to fend off competition from Facebook, Apple and others, and it showed in quarterly earnings announced Thursday that missed expectations and sent the stock $32 lower in after-hours trading.
Google reported net income of $2.3 billion in the first quarter, up 18% from a year ago, on revenue that rose 27% to $8.6 billion.
Excluding some items, Google earned $8.08 per share, about a nickel less than analysts had predicted. The stock, up fractionally to $578.51 during the regular session, fell 6% after the closing bell.
The company's employee ranks grew 28% from last year to 26,316 and Larry Page, the co-founder who became CEO a week ago, indicated that investing in staff, technology and even real estate is a necessity.
Page spent only a couple of minutes on a conference call with analysts on Thursday before turning it over to other executives.
After boasting of a "tremendous" quarter, he said that former CEO Eric Schmidt, now executive chairman, is focusing on government relations and partner outreach. He could have his hands full on the government front as the U.S. Federal Trade Commission is reportedly considering an anti-trust probe against the giant Internet search company.
Sergey Brin, meanwhile, has been "working very intensely on a few external projects for us," Page said. Page and Brin founded the company in 1998.
Google said that the number of ads clicked on by consumers rose 18% year-over-year. Susan Wojcicki, head of advertising products, touted a new product that Google is marketing initially to the movie and TV industries.
It's not about buying keywords, she said about the new kind of rich-media ad, because "Google figures out the right query" then serves up relevant video, audio, photos or whatnot that will advertise the product.
"Try searching for the movie Water for Elephants," she told the analysts on the call Thursday. "If you are searching for a movie and you wind up seeing the movie trailer in the ad, we're getting you a lot closer to seeing the perfect ad."